North Carolina Property Tax Monitor

As our regular readers know, Mecklenburg County is in the process of managing the fallout from its 2011 Revaluation.  First, Garrett Alexander resigned his post as Mecklenburg County Tax Assessor. Now, as reported in the Charlotte Observer, the Board of Commissioners has appointed his replacement.

Effective immediately, Bobby Sheilds will serve as the Mecklenburg County Tax Assessor.  This appointment will run until the end of Alexander's term which was set to end June 30 of 2013.  At that time, the Board will decide whether to re-up with Sheilds or find a new assessor.

Although Alexander resigned his post as tax assessor, he will remain a Mecklenburg County employee.  He has been reassigned to the County's finance department where he will serve as a senior fiscal analyst.  In that post, he will supervise county staff responsible for processing invoices for functions in the Human Services Agency.

We also mentioned in our last post that the Commissioners were mulling over whether to pursue a complete redo of the 2011 revaluation.  As reported by Fox-Charlotte, it appears they have made their decision for now.  Although the Commissioners have apparently instructed the Mecklenburg County Attorney to research the legality of a redo, they have decided to leave the 2011 revaluation undisturbed and to focus instead on getting future revaluations right.  In that regard, Pearson Appraisal Services (the firm that audited the County's 2011 revaluation) will do additional work to identify more neighborhoods with flawed revaluations, and the members of the Mecklenburg County Board of Equalization and Review will be replaced.

It remains to be seen what the Commissioners will do if the County Attorney advises them that a redo of the 2011 revaluation would be legal.  In our opinion, that is unlikely under the current law.  That said, and as we've previously discussed, Senator-elect Jeff Tarte has promised to work to pass legislation making the redo legal assuming it wouldn't be already. 

Stay tuned.

Last week, we told you that the results of Pearson Appraisal Service's audit of Mecklenburg County's 2011 revaluation were on the way.  On Tuesday, November 13, 2012, they were presented to the Mecklenburg County Board of County Commissioners.  To get the flavor of the audit results, take a look at the headlines from a few news outlets:

"Review finds major flaws with 2011 Meck revaluation" - Davidson News

"Mecklenburg 2011 revaluation was a failure, must be fixed" - The Charlotte Observer

"Report Shows Assessor's Office Misled Residents" - Fox Charlotte

You can read the 40-plus page slide presentation here(pdf). In summary, Pearson Appraisal Service examined three distinct sets of property for purposes of its audit.  It examined:

150 randomly selected neighborhoods;

The 50 neighborhoods which saw the highest land value increase per the revaluation; and

375 randomly selected properties.

Of the 150 randomly examined neighborhoods, Pearson Appraisal Service found major issues with 15 (10%) of them and minor issues with another 34 (22.66%) of them.  Just two-thirds were found to have been acceptably revaluated.  Of the neighborhoods with major issues, one-third were commercial neighborhoods.

Pearson defines "major issues" as instances of inequity or erroneous data that have a significant impact on the valuation of the neighborhood as a whole.  "Minor issues" are instances of inequity or incorrect information with respect to specific properties which did not have a major effect on the overall valuation of the neighborhood. 

Of the 52 neighborhoods which saw the highest percentage land value increases as a result of Mecklenburg County's 2011 revaluation, Pearson Appraisal Service found major issues with 20 (38.5%) of them and minor issues with another 18 (34.6%) of them.

Stated otherwise, within this subset of Mecklenburg County neighborhoods, Pearson found that only 14 were revalued in an acceptable manner.  That is an acceptable appraisal rate of less than 27%.

Of the 375 randomly selected individual properties which were examined, Pearson Appraisal Service found major issues with 44 (12%) of them and minor issues with another 45 (12%) of them.

This equates to an acceptable appraisal rate of about 76%, which is the highest of the three groups of properties examined.  Pearson concluded, however, that 76% is not good. Pearson stated that The International Association of Assessing Officers, which is regarded as the leader in assessment administration and property tax policy, says the standard is 95%.

The question is now what to do about the 2011 revaluation.  Not surprisingly, some (including Senator-elect Jeff Tarte) are already calling for the 2011 revaluation to be thrown out and to be redone - effective January 1, 2011.  Such an approach would be  to our knowledge  unprecedented.  It would also require legislative action, which Tarte says he will work to make happen. 

As always, we will continue to monitor the situation.

We mentioned previously that NC law requires that counties revalue their real property at least once every 8 years. Some counties wait the full eight years, while other counties revalue more often, typically every 4 years. Also, previous plans about when a revaluation will occur are sometimes changed from time to time due to any number of reasons, including changes in the economy, personnel changes, political changes, etc.

Under NC law, one can appeal a property tax valuation in any tax year, not just the revaluation year. If the property is over assessed, however, it is obviously more beneficial to appeal during the revaluation year, since the taxpayer will get the benefit of any reduction for all the years in the revaluation cycle, not just the appeal year and subsequent years until the next revaluation. Also, since regardless of the year of the appeal, the issue is usually still whether the county's determinination of fair market value of the property as of the revalution year is correct (see this post for exceptions), issues of proof can become more difficult the longer the time between the revaluation year and the appeal year.

Given the above, it is often important to know when a particular county is revaluing. A listing of the counties and each of their revaluation years is on the NC Department of Revenue website.  For a more direct route see this spreadsheet (.pdf) listing all 100 NC counties and their scheduled dates of revaluation, which I believe is even more current. A word of warning, however: Since plans for a revaluation can change, you are always well advised when contemplating an appeal to call the particular county and confirm the date of their next revaluation if that is important in your analysis.

The copyright holder of the image used in this post has released the image into the public domain, and unconditionally granted to anyone the right to use the image for any purpose, without condition.

We've been informed that revaluation notices informing Guilford County property owners of their new assessed values were mailed out on Thursday and Friday of last week.  They should be hitting mailboxes very soon if they aren't there already.  If you own property in Guilford County, be on the lookout for your notice.  If you don't get yours, be sure to contact the Guilford County Tax Office to find out where it is.

We can't tell you what to expect from your notice.  However, Doug Clark has reported at news-record.com that the total Guilford County tax base increased 2 percent since the 2004 revaluation.  As reported by Mr. Clark, the County's Tax Director Ben Chavis has stated that the increase is a factor of growth - not increased values. In fact, industrial properties as a whole have apparently lost value to the tune of 3.4 percent.  Interestingly, Mr. Chavis has also stated that he believes property tax appeals will result in a reduction in the tax base ultimately resulting in a reduction of the total increase to 1 percent.

If you think your property has been over assessed, we recommend you check out our previous post outlining the appeals process and review carefully your revaluation notice for all applicable deadlines.  If you miss one, you'll have to wait until next year to pursue a reduction in your assessment.

Image Copyright Meirion under the Creative Commons Attribution-ShareAlike 2.0 Generic License.

The North Carolina Department of Revenue has released its 2011-2012 documents pertaining to North Carolina property taxes. 

First is the spreadsheet entitled 2011-2012 Property Tax Rates and Revaluation Schedules for North Carolina Counties (.pdf). On this spreadhseet, you'll see for each North Carolina county the current tax rate of the county (but not of each municipality within the county), the year of the latest revaluation, and the year of the next scheduled revaluation.  According to this document, the following thirteen counties are scheduled for revaluation in 2012.

• Bertie
• Cabarrus
• Cherokee
• Franklin
• Guilford
• Madison
• Montgomery
• New Hanover
• Pamlico
• Pitt
• Rutherford
• Surry
• Watauga

If you own real property in one of the above listed counties, you should be on the lookout for a letter from the tax office notifying you of the new assessed value for your property.  Such notice will also give you information regarding your appeal rights in the event that you believe the proposed assessed value is in excess of fair market value.  If you think you've been over-assessed, a successful appeal in 2012 rather than one brought in later years will get you the most bang for your buck. Check out this post on the appeals process for more information about the various required actions and deadlines involved in pursuing such an appeal.

Second is the spreadsheet entitled 2011-2012 Tax Rates and Effective Tax Rates (.pdf). This spreadsheet provides the current tax rates for each county and for each municpality within each county.  Additionally, it shows the sales assessment ratio for each county and each municipality within each county from its latest revaluation. 

PLEASE NOTE THAT THIS INFORMATION IS ASSUMED TO BE CORRECT AND UP-TO-DATE ONLY AS OF THE DATE OF EACH DOCUMENT.  TAX RATES CHANGE FROM YEAR TO YEAR, AND SCHEDULED REVALUATIONS ARE SOMETIMES POSTPONED.  SO, USERS WOULD BE WISE TO CONFIRM THE INFORMATION SHOWN WITH THEIR PARTICULAR COUNTIES.

The copyright holder of the image used in this post has released the image into the public domain, and unconditionally granted to anyone the right to use the image for any purpose, without condition.

I suspect that revaluations are equally hated by both taxpayers and tax assessors.  The taxpayers hate revaluations because they believe their tax values, and therefore their tax bills, are going up.  Tax assessors also hate revaluations because of the tremendous amount of work they entail and the controversy they cause with taxpayers.

In North Carolina, personal property is revalued on an annual basis as of January 1 of each year.  NCGS 105-285(b)  Real property is handled differently.  North Carolina law requires that real property be revalued at least every eight years. NCGS 105-286(a)  However, counties can (and many do) choose to revalue real property more frequently than the octennial cycle.  Those county's electing to revalue sooner than required typically do so on a four-year cycle.

When the octennial cycle for revaluations was imposed, the start date for the counties was staggered. Both because of this staggered start date and because various counties have chosen to revalue more frequently than the octennial cycle, the year in which each of North Carolina’s one hundred counties revalues its real estate varies.  A good source for determining when each county is planning to revalue its real property is the North Carolina Department of Revenue website.  There you can find this spreadsheet (.xls), which shows tax rates and the latest year of revaluation for each North Carolina county and some municipalities.  You can also find this document (.pdf), which shows the tax rates, latest year of revaluation, and next scheduled revalaution for each North Carolina county starting in 2010 and going back five years.  Note, however, that these documents should only be used as a guide.  Many counties will (or have already) delay their revaluations and these documents may or may not be updated to so reflect.  You should call your County's tax office and ask when they plan to next revalue.

It is important to be aware of when the county in which your real property is located is scheduled for a revaluation.

Obviously, the year of revaluation is when the assessed value of your real property is likely to change.  If you don't appeal in the revaluation year, you've lost the right to reduce your taxes for that year.  While a failure to appeal the assessed value of your property during the revaluation year does not preclude you from appealing the assessed value of your property during a later non-revaluation year, a reduction resulting from  your non-revaluation year appeal would not have retroactive effect.  In other words, appealing in a revaluation year is the only way to realize the tax benefit of a valuation reduction in all years of the county's revaluation cycle.

The counties that are conducting a revaluation in 2011 are the following*:

• Ashe                             
• Brunswick
• Carteret
• Catawba
• Haywood
• Henderson
• Hertford
• Iredell
• Johnston
• Lincoln
• McDowell
• Mecklenburg
• Northampton
• Pender
• Rockingham
• Rowan
• Sampson
• Scotland
• Wayne

If you own real property in one of the above listed counties, you should be on the lookout for a letter from the tax office notifying you of the new assessed value for your property.  Such notice will also give you information regarding your appeal rights in the event that you believe the proposed assessed value is in excess of fair market value.  We will discuss in a subsequent post how the appeal process works, but it merits noting here that a failure to timely file an appeal will mean that you can no longer contest the assessed value for that particular year.

* NOTE that this post, as originally posted on March 9, 2011, also stated that Burke, Caldwell, Davidson, Gaston, Macon, Moore, Person, Rutherford & Stanly Counties were scheduled for 2011 revaluations.  Since that time, we learned that Rutherford County has postponed its revaluation to 2012; Burke, Caldwell, Davidson, Gaston, Macon, Person & Stanly Counties have postponed their revaluations to 2013; and Moore County has postponed its revaluation to 2015.

The copyright holder of the image used in this post has released the image into the public domain, and unconditionally granted to anyone the right to use the image for any purpose, without condition.